Mixed-Use Development With Timeshares

Hospitality industry experts are saying that the concept of fractional ownership, timeshares and residences joining forces with hotels is a promising idea. At panel on timeshare at the Meet the Money conference in Los Angeles in May, panelists discussed the possibility of hotel properties converting space into fractional ownership or timeshare properties.

Mixed-use of hotels and timeshares can be a double win if the developers take advantage of hotel strengths. Maximizing the marketing overlap is what’s most important. Over-aggressive growth within the mixed-use spaces can be risky. Converting high end space into fractional ownership rather than timeshares is generally more successful. It is also important to reduce the amount of conversion and even try to go for as much as double the space through fractional ownerships, control is key. Existing infrastructure can make thing complicated,  you have to make sure kitchen and plumbing wiring is allowed and zoning regulations must permit two and three bedroom spaces.

CEO of Vacation Finance, Bob Waun, said, “We think there’s great opportunity in the resort sector, condo-hotels, fractional ownership and timeshare”. The only foreseeable problem with mixed-use and timeshares comes with the lenders. They often do not understand the timeshare model and they need to be educated about mixed-use and timeshares before shared ownership is introduced to them.

Aspen Club : Future of Timeshare Development

Just one day after the Aspen Club and Spa received approval from the Aspen City Council the current managing partner, Michael Fox, left town for a family vacation. There have been some suspicions that Fox intended all along to secure approval for the new timeshare development and then leave it to a different developer to finish the job.

Fox claims that this notion is ludicrous and there is no way he is leaving the project. The idea of Aspen Club Living is a marketing concept that will be used to sell the new timeshare properties. The pitch will be about a rejuvenating retreat for your mind body and spirit. The timeshare sales will be used to help finance a major renovation and remodeling for the club which will help secure that the club stays open well into the future.

While the timeshare and fractional ownership properties are in huge supply, enough for about three or four years worth, rate of sales are going down. However the average cost for a fractional ownership or timeshare is around $500,000 according to a report from the Land Title Guarantee Company. The timeshare profits will also be used to improve the health and wellness of the local community residents. There will be a .25% assessment added to each timeshare to fund this community project.

Despite some doubts that this development is not in the best interest of the Aspen community Fox says the chances of this project actually coming into fruition are “pretty good”.

Aspen Club Timeshare Development Approved

The Aspen Club and Spa’s proposal to develop timeshares was passed on Tuesday June 2^nd by a 3 to 1 vote by the Aspen City Council. Councilman Steve Skadron unexpectedly voted in favor of the timeshares, though still unsure whether any guarantees would be upheld to provide public benefits. This decision was made with the consideration that had these timeshare proposals not been approved for construction then the entire aspen club and spa may be closed down. The new developer would most likely demolish the aspen club to build homes in place of it.

The approved motion will allow the club to build on an additional 90,000 square feet and construct 20 new condos to be sold as timeshares, 14 housing units and a new 41 space underground parking structure. These new developments will take place close to the roaring fork river near the tennis courts. The proceeds from the timeshare sales will go towards improving other facilities at the club.

Mayor Mick Ireland and council member Skadron are deeply invested in making sure an athletic facility will remain accessible to local residents.  The club has also promised to allot a 0.25 percent assessment of the sale of timeshares to go towards a fund for enhancement of community health and wellness. This assessment is estimated to make between 250,000 and $500,000 throughout the 25 year duration, assuming the initial sales of timeshares are around $80 to $100 million. The club will also spend $5 million on capital and programming improvements.

Difficulty for Aspen Club’s Timeshare Developments

The Aspen Club & Spa is proposing to build 20 timeshare condos, 12 housing units and an underground parking garage. The Aspen City Council will be holding a public hearing on May 10 to discuss the redevelopments to the Aspen Club.

One concern during the last meeting that Aspen Mayor, Mick Ireland, has is that he would want to prevent the owners from selling properties that have not been completed. Another foreseeable problem that the current managing partner and general manager of the club, Michael Fox, has is that construction financing may be too difficult should the current partnership sell to another owner.

Yet another city council proposed condition is that the club’s current zoning, which allows for single-family homes, be removed upon approval. Fox has gone on to say that if the club is not approved to build these timeshares it is likely that the entire club will be demolished so that single-family homes can be put up in its place.

On top of all this, members of the city council expressed that they would want traffic levels to stay where they are and should traffic levels increase they will implement paid parking as well as a shuttle service. This redevelopment of the Aspen Club to include timeshares was first proposed in 2005, it was then withdrawn and resubmitted in 2008 when it received more promising approval for construction.

Disney Opens Its First West Coast Timeshare Development

At a time when Marriott has ceased new timeshare development and the rest of the timeshare industry seems to be pulling back, Disney seems to be ratcheting up their time share presence.

The company’s timeshare division, Disney Vacation Club (DVC) held its grand opening for its first west coast property last week.  The 50-unit Villas at Disney’s Grand Californian Hotel & Spa was planned as part of an expansion of the Disneyland hotel & park in Anaheim, California.

With the diversification into California, Disney hopes to attract more members to DVC and more members who live away from the east coast.  According to Disney, over 86% of Disney Vacation Club’s 400,000-plus members reside east of the Mississippi.  (A family of four who purchases a DVC membership is counted as four members.)

The Disney brand is a strong one and with only 50 units, the Villas timeshare development should do well.  The question for buyers is do you want the Happiest Place on Earth to include maintenance fees?